Tips For Reading NFO Documents

With a lot of NFOs getting launched it becomes difficult for an investor to analyse each of them in depth. In fact, each NFO comes with a 100-page document on average. Reading it line by line is indeed a tough task. The article therefore highlights the sections that you should focus on

We have been witnessing a flood of New Fund Offers (NFOs). In fact, there were almost 88 NFOs that were launched in FY 2020-21, about 155 per cent higher than the historical average and 75 per cent higher than the 10-year average launch per year. This can very well be attributed to the rally in the equity market, which was followed by a 40 per cent fall in the equity market in March 2020 amid pandemic-induced lockdown. With a lot of NFOs getting launched it becomes difficult for an investor to analyze each of them in-depth. In fact, each NFO comes with a 100-page document on average. Reading it line by line is indeed a tough task.

Therefore, investors tend to choose NFOs that mutual fund intermediaries suggest to them. However, there is always a conflict of interest involved between the intermediary and the investor. Hence, it makes more sense to do your own research before subscribing to any NFO. This article will make things simpler for you through our explanation of how to read an NFO document. Certainly, you don’t need to read the whole document word for word. You just need to look at certain aspects that would matter a lot to you as an investor. Therefore, stay tuned with us to the end to become an expert in reading an NFO document like a professional!

The NFO Document